How do alternative investments differ from traditional investments?

Alternative investments differ from traditional investments in a number of ways. Traditional investments, such as stocks and bonds, are investments that are traded on public exchanges and are highly regulated by federal regulators. Alternative investments, however, are typically not traded on public exchanges and are subject to less regulation. In New York, Alternative Investment Law is designed to regulate certain types of alternative investments, such as hedge funds, private equity funds, and real estate investment trusts (REITs). Alternative investments are often much riskier than traditional investments, as they are not backed by any government-sponsored guarantee. They can also be more complex, making them suitable for experienced investors only. In addition, alternative investments typically require a much higher minimum investment than traditional investments, as most of them lack liquidity and are not as easily traded as stocks and bonds. Finally, alternative investments are often used as a way to diversify a portfolio, as they may provide higher returns than more traditional investments. However, this can also increase volatility while reducing overall returns. Therefore, investors undertaking alternative investments should carefully consider the potential risks and rewards before making any commitment.

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How do alternative investments differ from traditional investments?

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